Eurasia Drilling Company Limited and Schlumberger announced today the completion of the sale and purchase of each other’s drilling and service assets together with the formation of a Strategic Alliance in line with the Letter of Intent announced on 4th October 2010.
The key elements of the transactions completed on 28th April, 2011 are:
• EDC has purchased Schlumberger drilling and well servicing assets in Russia that include 19 existing drilling rigs with 17 drilling crews, 34 workover rigs with 25 related crews, and 23 sidetracking rigs with 20 related crews, currently operating mainly in Western Siberia. Primary clients of these rigs include Rosneft, TNK-BP, GazpromNeft and LUKOIL with a total drilling output of approximately 700,000 metres in 2010.
• Schlumberger has purchased EDC drilling services assets, including directional drilling, cementing and drilling fluids engineering and materials supply. These service lines include 24 cementing crews, 57 directional drilling/telemetry crews and 50 crews for drilling fluids.
• Schlumberger and EDC have concluded a Strategic Alliance in the CIS whereby Schlumberger and EDC will cooperate closely in relation to the supply of oil and gas services to EDC for a 5-year period. This provides opportunities for both companies to deploy the latest technologies for more complex onshore and offshore markets.
The total value of the transaction is approximately US $260 million, and includes a cash consideration of approximately US $173 million from EDC to Schlumberger.
Dr. Alexander Djaparidze, Chief Executive Officer of EDC, commented: “This is an important new alliance between two industry leaders that will further enhance our ability to improve performance for our Russian and international customer base. These additional rigs will strengthen our market position as well further diversify our client base in line with our development strategy. We are delighted to welcome our new colleagues to EDC.”
Maurice Dijols, President Schlumberger Russia added: “The combination of Eurasia’s drilling rig footprint with Schlumberger drilling services offers a unique solution to customers in Russia. The integration of Smith International and Schlumberger drilling technologies will lead to fit-for-purpose drilling assemblies as well as to additional drilling services and drilling fluids services for the Russian market—both on land and offshore.”